In 2022, I learned a lesson about money that no finance book ever taught me.
I had parked a portion of my savings in a crypto lending platform called Vauld, which was offering around 13% annual interest for staking crypto assets. At the time, it looked like a smart financial decision. High interest, growing crypto markets, and a platform that seemed reputable.
Then the crypto market collapsed.
The Terra/Luna crash, the default of Three Arrows Capital, massive withdrawals, and regulatory pressure created a perfect storm. In July 2022, Vauld froze withdrawals and entered judicial management in Singapore.
Just like that, my money was stuck.
The amount locked inside Vauld was about 10% of my net worth at that time.
When it happened, my heart sank.
For days I kept thinking about it. The mind starts replaying the same thoughts:
Why did I take that risk?
Why didn’t I diversify more?
What if the money never comes back?
It wasn’t just about the money.
It was about the percentage of my wealth that was suddenly uncertain.
What Happened Over the Next Few Years
Over the following years, the judicial management process slowly progressed.
Eventually, Vauld started returning funds to users. Through multiple distributions, I recovered around 80% of the money that was stuck.
So in the end, the loss was far smaller than I initially feared.
But something interesting happened during those four years.
While I was waiting for the recovery process, my career continued, my income continued, and my savings continued.
My net worth kept growing.
So even though the absolute amount stuck in Vauld remained roughly the same, its importance in my financial life kept shrinking.
The money that once represented 10% of my net worth now represents about 1%.
The Absolute Number Didn’t Change. The Meaning Did.
If I had permanently lost that amount in 2022, it would have been devastating.
Today, losing the same amount would barely register emotionally.
Why?
Because money is not experienced in absolute numbers.
It is experienced in percentages of net worth.
Consider this:
| Net Worth | Loss | Emotional Impact |
|---|---|---|
| ₹10 lakh | ₹1 lakh (10%) | Extremely painful |
| ₹1 crore | ₹1 lakh (1%) | Manageable |
| ₹10 crore | ₹1 lakh (0.1%) | Almost irrelevant |
The amount is identical.
But the psychological impact is completely different.
Early Financial Losses Hurt the Most
When you are early in your financial journey, every decision matters a lot more.
Your net worth is small.
Each investment is a large percentage of your wealth.
Every mistake feels huge.
This is why:
Early investing mistakes feel catastrophic.
Market crashes feel personal.
Losing money feels like losing years of progress.
But as your financial base grows, something powerful happens.
Your margin for error increases.
The Compounding of Perspective
We often talk about compound interest.
But there is another kind of compounding that people rarely discuss:
Compounding emotional resilience.
As your net worth grows:
Losses hurt less.
Volatility feels normal.
You stop obsessing over every rupee.
The same financial event that once caused sleepless nights eventually becomes just another line item in your balance sheet.
The Hidden Benefit of Wealth
People often think wealth is about:
luxury
comfort
status
But one of the biggest benefits of wealth is psychological stability.
When your financial base becomes large enough:
market crashes stop scaring you
bad investments stop haunting you
temporary losses stop dominating your thoughts
Your financial life becomes calmer.
The Real Lesson From My Vauld Experience
The Vauld incident taught me something important.
The goal is not to avoid every financial mistake.
That’s impossible.
The real goal is to build a net worth large enough that mistakes stop mattering.
Today, the same amount of money that once represented 10% of my net worth now represents 1%.
The number didn’t change.
But its power over my emotions completely disappeared.
Final Thought
Money doesn’t hurt because of its absolute value.
It hurts because of its relative importance in your life at that moment.
As your net worth grows, losses shrink—not in rupees, but in meaning.
And that may be one of the most underrated benefits of building wealth.
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